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by Stockwatch Business Reporter

West Texas Intermediate crude for August delivery added 98 cents to $50.11 on the New York Merc, while Brent for August added $1.03 to $50.91 (all figures in this para U.S.). Western Canadian Select traded at a discount of $13.40 to WTI ($36.71), unchanged. Natural gas for July added 2.1 cents to $2.698. The TSX energy index added 5.36 points to close at 190.54.

Baytex Energy Corp. (BTE) added 22 cents to $7.65 on 9.08 million shares, despite receiving an unpleasant visit from the tax man. The Canada Revenue Agency (CRA), following up on its proposal in 2014 to reassess some of Baytex's indirect subsidiaries, has now delivered the reassessments. The issue goes back to 2010, when Baytex acquired several private trusts that had accumulated non-capital losses of $591-million. In subsequent tax years, Baytex deducted the non-capital losses when calculating income tax, a practice that it and its lawyers defend wholeheartedly. The CRA, however, wants to disallow those deductions under the general anti-avoidance rule of the Income Tax Act. It warned in November, 2014, that it might challenge Baytex's filings for the 2011 to 2013 tax years. Baytex estimated at the time that if the CRA kicked off the dispute and Baytex ultimately lost, the potential tax hit could be as much as $57-million. It was not concerned enough to stop deducting the non-capital losses, however, and so continued with the practice in 2014 and 2015. As a result, the CRA has now sent reassessments for 2011 through 2015, and the potential hit has gone up to $120-million and an additional $14-million in penalties. The dispute will go on for another two to four years. Baytex says it is confident. Importantly, it does not expect to face this same issue in future years, or to see the CRA's demands climb any higher. Brian Ector, senior vice-president of capital markets and public affairs, told the National Post, "The full amount of losses available to us have been deducted, so I don't anticipate this going beyond the [$120-million plus interest] level captured in today's press release."

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